Advantage Data High Yield Bond Market Summary

Niral Mehta

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European Bond Research - April 15, 2019

Posted by Niral Mehta on Apr 15, 2019 12:21:55 PM
UK ECONOMY LEANS ON CONSUMERS AS BREXIT DRAGS  ON BUSINESSES.   Britain’s economy only grew 1.4 percent in 2018, the weakest increase in  six years. Bank of England’s Governor,   Mark Carney, stated: “When the economy is reliant on consumers, growth becomes very one-dimensional.”  Bank of England has signaled not raising interest rates  allowing cheaper capital to circulate around the economy. The value of business investment lost in Britain’s economy since the June 2016 referendum is roughly 10 billion pounds. Business investment fell every quarter of 2018, the longest decline since the 2008 financial crisis. The  UK 10-year Gilt  increased two-basis points.   FTSE 100  -0.03%,  STOXX Europe 600  +0.14%,  CAC 40 +0.09%,  German DAX +0.18%.

TRADE NEGOTIATIONS between the EU and the United States will not be easy, “but both sides should benefit in the end,   German economy Minister Peter Altamaier  said on Monday." The goal is to reduce tariffs to zero and ultimately fend off a trade conflict. Negotiations will commence later this week and will continue for the upcoming months. Among European high-yield bonds showing a concurrence of top price gains at appreciable volumes traded,   Barclays PLC (USD) 4.375% 9/11/2024 made some analysts' 'Conviction Buy' lists. (See the chart for   Barclays PLC bonds  below).   Niral Mehta ( nmehta@advantagedata.com).

Sovereign-Debt Snapshot

Country Maturity (Y) Yield (%) Previous (%) Spread (bp)
Australia 10 1.893 1.869 -66.5  
Belgium  10 0.495 0.434 -206.2  
France  10 0.402 0.334 -215.5  
Germany  10 0.059 -0.007 -249.9  
Italy  10 2.395 2.372 -16.2  
Japan  10 -0.048 -0.059 -260.5  
Netherlands  10 0.134 0.073 -242.3  
Portugal  10 1.169 1.130 -138.8  
Spain  10 1.053 1.009 -150.4  
Sweden  10 0.264 0.228 -229.3  
U.K.  10 1.214 1.150 -134.3  
U.S.  10 2.557 2.498 ...

Credit-Default Swap Market

LATEST NEWS:  Top moves, sovereign tighteners (5Y): Belgium 23 bp and Finland 12 bp. Sovereign wideners (5Y): France 27 bp and China 41 bp.

New Issuance

New Issues New Issues [Continued]

1. Basellandsch KTBK (CHF) 0.375% 5/13/2030 (04/15/2019):180MM Senior Unsecured Notes, Price at Issuance 100.865, Yielding .3%.

 

ADI Indexes

DATA CHECK:
iShares Core EUR UCITS iShares Euro High Yield UCITS
NAV as of 04/15/2019, 131.30 NAV as of 04/12/2019, 104.39
Daily NAV Change (%) -0.02% Daily NAV Change (%) +0.05%

OVERALL EUROPEAN CREDIT MARKET:
The euro-zone economy shows signs of positive momentum, although conditions are expected to deteriorate hindered by the termination of quantitative easing, weakening credit rating quality, and uncertainty regarding the outcome of Brexit. Closely watched indicators and rates:
  • Eurostat's unemployment rate: currently 7.8% (seasonally adjusted, February 2019)
  • Eurostat's quarterly GDP: 0.2% (2018 Q3 Final)
  • 6-month Euribor: current value -0.232%, as of 04/12/2019

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Topics: Analytics, bonds, junk bonds, bond market, corporate bonds, market analytics, New Issues, News, research, EU, market update, European

European Bond Research - April 12, 2019

Posted by Niral Mehta on Apr 12, 2019 12:19:26 PM
GERMAN GOVERNMENT EXPECTS THE ECONOMY TO GROW BY 0.5 PERCENT THIS YEAR, LOWER THAN A RECENT ESTIMATE OF 0.8. German Finance Minister mentioned, “ The economy is losing momentum but still growing, with private consumption and state spending expecting to support overall growth this year.”  Unresolved trade disputes, Brexit uncertainty and a sluggish world economy have hit foreign demand and hurt manufacturers.  Stricter pollution standards are challenging the country’s car manufacturers, a critical component of their GDP. If  the slowdown worsens, it will put pressure on the ECB to provide more  stimulus for the Eurozone economy. The  UK 10-year Gilt  increased six-basis points.   FTSE 100  -0.14%,  STOXX Europe 600  +0.11%,  CAC 40 +0.33%,  German DAX +0.54%.
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Topics: Analytics, bonds, junk bonds, bond market, corporate bonds, market analytics, New Issues, News, research, EU, market update, European

European Bond Research - April 11, 2019

Posted by Niral Mehta on Apr 11, 2019 12:29:36 PM
EU GRANTS BRITAIN  SIX MORE MONTHS TO LEAVE THE BLOC  EXTENDING THE DEADLINE INTO OCTOBER, ALTHOUGH, IT COULD HAPPEN QUICKER ACCORDING TO THERESA MAY.  “There is huge frustration from many people that I had to request this extension, but it was the logical thing to do,” stated Theresa May. German Chancellor, Merkel mentioned, “An orderly exit by Britain can be best ensured if we  prolong the duration of a deal.” The ECB will keep its monetary policy as accommodative as possible to ensure positive growth across the economy. The  ECB hinted they will leave interest rates unchanged amid trade tensions and uncertainty around  Brexit. The  UK 10-year Gilt  increased five-basis points.   FTSE 100  -0.09%,  STOXX Europe 600  +0.13%,  CAC 40 +0.83%,  German DAX +0.34%.
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Topics: Analytics, bonds, junk bonds, bond market, corporate bonds, market analytics, News, Syndicated Bonds, research, EU, market update, European

European Bond Research - April 10, 2019

Posted by Niral Mehta on Apr 10, 2019 12:16:43 PM
EUROZONE’S GOVERNMENT BOND AND EQUITIES MARKETS RALLIED, WHILE THE EURO DECLINED AFTER THE ECB CHIEF MARIO DRAGHI WARNED THAT THE ECONOMY FACES MANY HEADWINDS. The ECB remains  dovish on the outlook for inflation as it sees further depreciation over the upcoming months.  Germany’s benchmark 10-year bond yield fell to a one-week low of minus 0.038 percent and the  French 10-year bond yields fell 3 bps, resulting in higher bond prices. The ECB and Bank of England have  implemented “swap-lines” in place to offer each other’s currencies in banks in their respective jurisdictions if money markets freeze up. European Union leaders  will  grant Prime Minister Theresa May a “second delay to Brexit at an emergency summit; timeframe and terms have not been disclosed.” The  UK 10-year Gilt  declined one-basis point.   FTSE 100  -0.03%,  STOXX Europe 600  +0.26%,  CAC 40 +0.26%,  German DAX +0.51%.
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Topics: Analytics, bonds, bond market, market analytics, News, research, EU, market update, European

European Bond Research - April 9, 2019

Posted by Niral Mehta on Apr 9, 2019 12:28:26 PM
UK ECONOMY TO LOSE 3.5 PERCENT OF GDP IN NO-DEAL BREXIT,” STATED THE IMF. The increase in trade barriers has a   detrimental  impact on UK foreign domestic demand. The   IMF downgraded  its   forecast for economic growth in Britain this year to 1.2 percent from a forecast of 1.5 percent, the weakest since 2009.   Britain could suffer a  loss of 2-3 years of positive GDP if it departs the EU without a deal. The downward revisions reflect the negative effect of   prolonged uncertainty about the Brexit outcome. BoE stated, “We are ready to take   a cautious, data-dependent approach  to monetary policy.” The  UK 10-year Gilt  declined one basis point.   FTSE 100  -0.35%,  STOXX Europe 600  -0.47%,  CAC 40 -0.65%,  German DAX -0.94%.
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Topics: Analytics, bonds, bond market, market analytics, News, research, EU, market update, European

European Bond Research - April 8, 2019

Posted by Niral Mehta on Apr 8, 2019 12:37:03 PM
WEAK TRADE DATA CASTING DOUBT ON GERMANY’S ECONOMIC  STRENGTH . German exports and imports declined more than expected in February dropping by an aggregate of 1.3 percent  in February. German exporters are suffering from a   slowing world economy, trade disputes and Brexit angst.  The trade surplus edged up to   18.7 billion euros  from a   revised 18.6 billion euros the previous month. German industrial orders fell by the biggest margin in more than two years.   Brexit deadline is looming and a “no-deal Brexit makes no sense and is the worst possible solution,”   stated European Agriculture Commissioner, Phil Hogan. The  UK 10-year Gilt  declined one-tenth of a basis point.   FTSE 100  +0.07%,  STOXX Europe 600 -0.19%,  CAC 40 +0.38%,  German DAX -0.39%.
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Topics: Analytics, bonds, bond market, market analytics, News, research, EU, market update, European

European Bond Research - April 3, 2019

Posted by Niral Mehta on Apr 3, 2019 12:19:26 PM
UK HEADED FOR A DOWNTURN AS BREXIT WORRIES   NEGATIVELY   IMPACT SERVICES SECTOR. The PMI, a  barometer of the economy’s health   tumbled to 48.9 in March from 51.3 in February, inducing the sterling to dip to $1.3156.  “A stalling of the economy in the first quarter will create further   stress on the second quarter unless demand revives suddenly, which seems highly improbable with   Brexit looming,” mentioned IHS Markit. “In a no-deal scenario, both the EU and the UK would face a challenge of protecting their single markets,” mentioned   European Commissioner, Pierre Moscovici. The UK 10-year Gilt  increased   seven basis points.  FTSE 100, +0.23%,  STOXX Europe 600 +0. 91%,  CAC 40 +0.76%,  German DAX +1.68%.
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Topics: Analytics, bonds, junk bonds, bond market, market analytics, News, research, EU, market update, European

European Bond Research - April 2, 2019

Posted by Niral Mehta on Apr 2, 2019 12:35:06 PM
BANK OF ENGLAND TO EXTEND BREXIT LIQUIDITY AUCTIONS  UNTIL END OF JUNE, providing smooth   market conditions given Britain leaves the European Union.  “ The bank will continue to monitor growth  and market liquidity on a daily basis, and stands ready to take additional action if necessary.”  The EU has placed a series of   contingency measures  to deal with a no-deal Brexit; including a   temporaryrecognition of Britain-based clearing houses which processes multi-trillion euro   derivatives transactions.  The   euro fell below $1.12 as U.S. economic data outperforms expectations.  The pound fell half a percent after lawmakers rejected four   Brexit proposals. The UK 10-year Gilt declined   four basis points.  FTSE 100, +1.08%,  STOXX Europe 600 +1. 68%,  CAC 40 +0.41%,  German DAX +0.77%.
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Topics: Analytics, bonds, bond market, market analytics, News, research, EU, market update, European

European bond Research - April 1, 2019

Posted by Niral Mehta on Apr 1, 2019 12:38:41 PM
DEUTSCHE BANK TURNS BEARISH ON THE STERLING AS BREXIT  CHAOS DEEPENS.  The   bank has raised its estimate for the chances of a no-deal   Brexit to 25 percent from 20 percent.  Brexit uncertainty has cost the European Union   600 million pounds per week since the 2016 referendum.  It has cost the world’s fifth largest economy nearly   2.5 percent of GDP, inducing larger economic output losses compared to other countries.  Eurozone inflation   declined, adding to the pressure on the   ECB as it battles economic slowdown.  Although—wages   are rising and employment is at a record high, consumer prices have repeatedly disappointed. “It is likely to remain well   below the ECB’s inflation target of close to 2 percent over the rest of the year." The UK 10-year Gilt increased  four basis points.  FTSE 100, +0.54%,  STOXX Europe 600 +1. 23%,  CAC 40 +1.06%,  German DAX +1.37%.
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Topics: Analytics, bonds, bond market, market analytics, News, research, EU, market update, European

European Bond Research - March 29, 2019

Posted by Niral Mehta on Mar 29, 2019 12:21:43 PM
BRITAIN AGREED WITH THE EU TO DELAY BREXIT FROM THE ORIGINALLY PLANNED MARCH 29 UNTIL APRIL 12.  A  further delay is imminent until May 22 “if the withdrawal agreement is approved this week,” House of Commons Leader, Andrea Leadson.  The  volatility of the crisis had led investors fatigued over uncertainty, creating an unstable market.  Britain’s financial regulators have given  European Union banksinsurers and asset managers ample time to prepare for a no-deal Brexit.   Trade in a host of countries will take a hit creating import and export barriers if there is no  transition deal in place.  The UK 10-year Gilt decreased  one basis point.  FTSE 100, +0.50%,  STOXX Europe 600 +0.48%,  CAC 40 +0.83%,  German DAX +0.75%.
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Topics: Analytics, bonds, bond market, market analytics, research, EU, market update, European


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